Relief for homeowners as average house price rises

Published on Saturday 5 December 2009 09:41

THE average house price in Edinburgh has shot up by more than £34,000 on the same time last year, with 50 per cent more properties changing hands.

New figures released by the Edinburgh Solicitors Property Centre suggest a price hike of almost 18 per cent last month, compared to November 2008.

The news will come as a relief to homeowners in the wake of figures from Lloyds

TSB last month which pointed to a 12 per cent drop in house prices over the past three months.

According to the ESPC, the average house price in Edinburgh last month stood at 225,449, up from 191,272 on the same month last year. The rise is being put partly down to a higher proportion of expensive homes being sold, but experts said there were also significant rises when comparing other properties.

The average price of a one- bedroom flat has gone up 10.3 per cent over the past year to 131,838, while a three or four bedroom house now fetches an average of 296,501, up 9.4 per cent on November 2008.

The number of houses sold has risen 51.7 per cent, with 440 sales in November 2009, and 47 per cent of properties sold at fixed price achieved the asking price, up from 25 per cent in November 2008. The average time taken to sell a home was three months, down from four months a year ago. ESPC business analyst David Marshall said the centre's figures were more likely to be accurate than those published by Lloyds TSB's Scottish House Price Monitor last month.

He said: "I suspect that they will base it on their own mortgage book figures and we base it on all the sales that go through us, so usually our sample sizes tend to be a good bit larger. There will also be a time difference – we're looking at the day the property sells.

"Usually you tend to see the various figures following the same trend, and it's certainly unusual to see the Lloyds figures being so out of line with ourselves and what we've seen with Nationwide and the Registers of Scotland, but it may just be a statistical anomaly in their figures."

Mr Marshall said that, while the average house price had shot up, it was partly due to the growth of the upper end of the market, where mortgage companies were more willing to lend.

He said the overall picture was of a steady, more modest rise, and added: "You also have to remember that we're comparing with November last year, which was the lowest figure recorded last year, which skews the annual increase. Things are inching upwards, but don't assume that things will fly up 18 per cent every month from now on, because that's not the case."

However, Steven Currie, director of estate and lettings agent Currie and Murray, said he was still sceptical that confidence was recovering in the market.

"I really hope that these figures are 100 per cent accurate, but what I'm seeing is that our letting side is going through the roof and the man on the street is saying, 'We're not going to buy, we're going to rent, and commit to 12 months' rental and see what happens'.

"These are guys who have got the money to spend – in some cases people are even paying 12 months' rent in advance, which is unheard of. It's money that they could put towards a deposit, but it's because people are still nervous and are still saying, 'Let's see what happens'."